LL Flooring Holdings, Inc., a leading specialty retailer of hard-surface flooring in the U.S., today announced financial results for the quarter ended June 30, 2023.
Net sales decreased 20.9% to $236.4 million for the quarter ended June 30, 2023, versus the second quarter of 2022, driven by a decrease in transaction count reflecting by lower spending by consumers and pros. Total comparable store sales decreased 22.2% versus the same period last year. During the second quarter, the company closed one store, bringing total stores to 442 as of June 30, 2023.
"Our second quarter performance primarily reflected the continued impact of the difficult macro backdrop that has impacted big ticket discretionary purchases as well as the demand for home remodeling projects," said President and Chief Executive Officer Charles Tyson. "We also continued to experience pressure from low brand awareness as we continue on our transition to LL Flooring. We are actively pursuing operational opportunities to improve our performance including broadening and growing our brand awareness among consumers to drive traffic; ensuring a consistent customer experience across our omnichannel network to improve conversion; and improving operating efficiencies by intently working to reduce costs while focusing investments on our top growth priorities."
Gross profit decreased 20.8% and gross margin of 35.8% increased 10 basis points. Included in gross profit was $2.4 million in incremental costs related to U.S. Customs detentions on flooring products that contain PVC as a consequence of the Uyghur Forced Labor Prevention Act. Adjusted gross profit1 of $86.9 million decreased $21.1 million and adjusted gross margin1 of 36.7% increased 60 basis points. The decreases in both gross profit and adjusted gross profit are driven by a decrease in transaction count reflecting lower spending by pros and consumers, while the increase in gross margin and adjusted gross margin1 reflects the company's ability to offset higher material and transportation costs (collectively up more than 400 basis points) through pricing, promotion, and alternative country/vendor sourcing strategies.
